Locked down, cashed up and with nowhere to go one year into the pandemic, a new Australian dream of housing evolved.
This masthead is continuing a series on whether the Great Australian Dream of home ownership is over, looking at the turning points that have led to the problems of affordability we have today.The price of land is one large factor – the Grattan Institute’s Brendan Coates says that since the 1950s, land values have accounted for about 80 per cent of the growth in home prices.
As those forces were at work encouraging a generation of ordinary Australians to treat property like a financial investment, governments dealt with affordability issues by using variations of home buyer grants to hand cash to potential home buyers.Eslake has disliked first home buyer grants, and other policies that give prospective buyers more cash, since they were first introduced in the 1960s.
By the 1990s, that growth had started to slow, and by the new millennium, population growth surpassed the increase in housing stock. “Housing demand is actually stronger than it would be if, for example, all of our population growth came from adding children. But because we’re adding adults, it immediately feeds demand,” she says.
The Reserve Bank now regularly tracks average household size, but at this stage no one knows whether the pandemic change in household size is permanent.